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Australia checks in to lifestyle hotel trend

Lifestyle hotel brands are slowly emerging as the next key growth sector in Australia, as operators look to tap into the next generation of travelers and draw millennials back to the hotel market.

This was a key outtake from CBRE Hotels’ annual Check IN report which examines Australia’s hotel sector, emerging trends and the market outlook.

CBRE’s report defines a lifestyle hotel as one that has many of the characteristics of a boutique hotel, with a heavy focus on being both creative and innovative, as well as having the potential to be replicated and rolled out across the globe.

CBRE Research Manager Benjamin Martin-Henry noted that while the uptake of lifestyle brands hasn’t been as strong in Australia as other regions, owners are recognising the threat of Airbnb and the changing accommodation preferences of millennials and Generation Z.

“The latest generations are becoming key drivers of the lifestyle and leisure segment, with preferences for experiences, highly social spaces, constant connectivity and availability of food and beverage services,” Mr Martin-Henry said.

A major operator tapping into the lifestyle brand is the Marriot with its Moxy venture, specifically targeted at a younger demographic. On its website, it describes its hotels as being “one-part razzle to one-part dazzle” with 24/7 food and drinks and a lobby like a playground.

Additionally, Marriott International’s W Hotel chain has become one of the largest and most well-known lifestyle brands – with Australia preparing to welcome the chain in Sydney, Melbourne and Brisbane.

However, it is not just millennials driving a new breed of hotels. One subcategory of lifestyle hotels is the wellness brand – which appeals to a broad range of travelers including the corporate sector.

IHG is a key example of hoteliers branching into the wellness space with its EVEN Hotels chain. EVEN Hotels are equipped with fitness facilities, healthy eating options and an environment that promotes the feeling of wellbeing – as the brand recognising the growing appeal of being health focused while travelling.

However, Mr Martin-Henry said that while lifestyle brands were emerging on owner’s radars in Australia, the uptake of the concept could be slow in Australia.

“Established brands have proven track records of success, therefore, presenting a more appealing investment proposition. By choosing a brand that is already established in the market place, there are more opportunities to leverage off previous experience and supply chains already in place,” Mr Martin-Henry said.

“In Australia, we have found that while operators are keen to get a foothold into this sector, it is difficult to find an owner who is willing to branch into the lifestyle space. However, as millennials become an increasingly important customer group, brands will need to be well placed to capture this next generation of corporate travelers.”

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